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Unformatted text preview: the impetus for shortcuts, particularly as they relate to time‐consuming safeguard practices. In a crisis situation, governments may feel justified in seeking to bypass lengthy procurement policies such as international competitive bidding, pre‐
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qualification, and re‐bidding in the case of insufficient competition or non‐responsive bids . The temptation to trade time for competition raises the risk of corruption, collusion, and public skepticism. Rushed procurement processes run the risk of being self‐defeating and costly elements of stimulus. 146 The Global Experts Team for Public Sector Management, in conjunction with LCSPS, is undertaking a study of best practices in the management of stimulus programs that includes a review of US and other OECD institutional arrangements. 147 Heller (2005). 148 Calderon and Fajnzylber (2009)
149 Kenny (2007). 111 Conclusions Infrastructure investment is already a central part of the stimulus plans of LAC as the region confronts the growing financial crisis. The employment generation potential of the infrastructure investment component of stimulus may be considerable—averaging around 40,000 jobs per US$1billion in LCR for a basket of investment. This excludes the tertiary effects of induced employment from direct and indirect 150
employee consumption. Albeit limited in scope, rural road maintenance projects initiated through micro‐enterprises may produce 200,000 to 500,000 direct jobs per US$1billion of disbursements. Levels of employment generation per package of investments is highly sensitive to local wages, the division among skilled and unskilled workers, the sector under consideration (i.e., the component pieces in the “basket”), the technology being deployed in each project investment, the degree of importation of inputs, and— in areas without slack labor conditions—substitution effect. To understand the impact of investments in times of crisis, policy makers will benefit from sector‐level analysis, comparative technology analysis, and data on the sourcing of inputs. In addition, in order to assure the effectiveness of infrastructure investments in a crisis environment, governments may wish to consider the strengthening of planning processes which weigh the trade‐offs associated with multiple investments; procurement processes which are robust in the face of time pressures; and disbursement plans which keep up with the levels of expected investment activity. Finally, short‐term plans for infrastructure investment are most effective when viewed in the context of the long‐term objectives of growth and poverty alleviation which remain infrastructure’s fundamental contribution to economic activity. 150 Although US estimates from highway construction more than double the employment generation estimates when induced jobs are added, it should be remembered that other forms of transfers from government—tax credits, CCTs, food stamps—would also generate induced employment 112 Bibliography Calderon, C. and P. Fajnzylber (2009) “How much room does Latin America and the Caribbean have...
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